A businessman walks into a (airport lounge) bar…can he deduct that?
No, this isn’t a riddle and the answer is yes. Generally speaking, an airport lounge club membership can be claimed as a tax deduction.
What does the ATO have to say about this?
Funny you should ask. According to the ATO, “The primary function of Airport Lounge Clubs is to provide business facilities and prompt and efficient services relating to the travel of their members.”
Now, you may be thinking the initial thought that also popped into my mind…what about the complimentary hors d’oeuvres and bottomless mimosas served to loungers? Don’t worry. It’s no huge secret and the ATO does in fact know what occurs. However, they simply state that this hospitality is ‘merely incidental to the primary function’ of the clubs’ business.
Can the entire membership be deducted?
Taking a flight is not exclusive to business travelers — however, it is essential to certain businesses. That being said, you can most certainly use your Qantas or Virgin memberships when you’re vacationing with friends or family too. With that in mind, you should be separating business use from personal, and only deducting the business percentage on your tax return.
You took 10 trips in total over the past year and visited the Qantas lounge every time. 7 of those trips were for business, while only 3 were spent vacationing with the family. You could claim 70% of your membership cost as a tax deduction.
Battle of the airport lounge memberships.
Are you Team Qantas or Team Virgin? The annual membership cost and wifi accessibility are about the same in both membership programs’ lounges. So what can serve as your deciding factor? Many frequent-flyers suggest taking a look at the breakfast selection. With a little research and a bit of an appetite, it’s been confirmed that the Qantas Business Lounge won the gold by covering all their bases with actual table service and a rotating array of hot dishes for guests. Virgin and Qantas Club memberships come in at a close silver and bronze. Good news is all lounges come with unlimited cuppas – complete with latte-art. Sounds good to us!Tags: Australian tax deductions, business tax deductions, job specific tax deductions